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Pay-as-you-go car finance

The finance application process at Stoneacre

Stoneacre’s Pay-as-you-go finance is designed for customers who struggle to obtain finance with mainstream lenders

This innovative, pay-as-you-drive option is also known as black box car finance.

Pay-as-you-go finance is built around a traditional Hire Purchase (HP) agreement, requiring an initial deposit payment plus a schedule of monthly repayments. The car remains the property of the lender and ownership only transfers when all payments have been made.

What makes this option different is the inclusion of a small black box within the car. This is similar to the kind of black box fitted by insurance companies. However, rather than monitoring driver behaviour, it acts as a hi-tech payment reminder.

How does payment work for PAYG black box car finance?

The black box is fitted by a qualified technician and discreetly located under the dashboard or in the glove box. Once installed, this box connects into your car's internal computer via the EOBD port and communicates with the lender using GPRS functionality.

The only time you’ll ever notice this remote communication is three days before your monthly payment is due, when the box’s green light turns red and flashes. Your lender might also send you an SMS reminder.

Once your payment has been made, you’ll receive an activation code. Key this into the box and the light will stop flashing and turn green for the rest of the month.

Come the end of your Pay-as-you-go car finance agreement, the black box is removed and the ownership of the car transferred to you, provided all payments have been made. Alternatively, some lenders will allow you to purchase the box and keep it fitted as a permanent immobiliser.

Black box - insurance
Black box - insurance

Why do lenders use the black box?

Black boxes have have been shown to reduce car finance payment default rates by up to 500%. This gives lenders the confidence to provide car finance for customers who may have previously been considered too high-risk.

Using Pay-as-you-go car finance and paying on time also helps customers build up a repayment record that contributes to an improved credit rating. Eventually, this could open the door to mainstream lenders and lower finance rates.

Car keys and calculator - finance
Car keys and calculator - finance

What happens if I fail to make a car finance payment on time?

Should you miss a payment, the activation code won't be issued and you’ll be unable to drive the car. However, most lenders allow a 30 day grace period which lets you keep using the car while you sort the payment out.

If your payment still hasn’t been made after this period, the GPRS unit will remotely deactivate the car. Essentially, if you don't pay you can't drive. This is why this option is known as Pay-as-you-go car finance.

Frequently Asked Questions

  • Can you have the black box removed?

    No. The car remains the property of the lender until all the payments have been made, at which point the black box is removed and ownership transferred to you. Some lenders let you buy the box and keep it fitted as permanent immobiliser. 

  • Can you pay weekly with a black box?

    Although some lenders offer Pay-as-you-go car finance with weekly payments, most insist on a single monthly payment as this is usually easier for both parties to manage. 

  • Will the car be disabled while in use?

    Understandably, the question of when and where the car might be disabled is one of the biggest concerns. To keep all road users safe, the car can only be disabled after being left idle. Before this, the black box will issue a warning sound and the red light will flash. Some lenders also send an SMS warning.

Finance Disclosure

For the purpose of this promotion Stoneacre is not acting as a lender but as an independent credit broker working with a panel of lenders. A list of these lenders is available upon request. Stoneacre do not charge a fee for an introduction to a finance provider, however, we may or may not receive a commission.

Decidebloom Ltd t/a Stoneacre, Omega Boulevard, Capitol Park, Thorne, DN8 5TX, is authorised and regulated by the Financial Conduct Authority. Our FCA number is 308726. You can verify this by visiting the FCA website or by contacting the FCA on 0800 111 6768.